Can You Get a Loan With No Credit Check?

You can get a loan without a credit check, but the lender will look at something else, usually your income and your bank account. These loans tend to cost far more than ones that check your credit. Before you sign, it helps to know what you’re agreeing to and how to protect your bank account.

What lenders check instead of your credit

A no-credit-check lender still wants proof you can repay. Some ask for pay stubs or benefit statements. Some online lenders ask you to connect your bank account through an app. The app reads your transaction history and looks for regular deposits, like a paycheck, government benefits, or steady gig income.

Connecting your account often comes with a second request: permission for the lender to withdraw payments automatically. Read that part carefully. It decides how the lender collects, and what happens if the money isn’t there on the due date.

What no-credit-check loans cost

Some loans skip the credit report because they secure repayment some other way. What they check instead is the thing you’re putting at risk.

Payday loans

Payday loans check your income and access to your bank account. To get a payday loan, you typically write the lender a check or authorize it to electronically debit your account on the due date.

Because the lender collects straight from your account, it doesn’t generally verify your ability to repay, and that gap shows up in the price.

A typical two-week payday loan charging $15 for every $100 borrowed works out to an APR of almost 400%, according to the CFPB. If the withdrawal fails, the lender may charge a late fee, and your bank may charge you a fee for not having enough money in the account.

Most storefront payday lenders don’t report your on-time payments to the bureaus, but an unpaid loan sent to collections can be reported.

Title loans

With a title loan, you usually need to own your car free and clear, showing the lender the car, a photo ID, and proof of insurance. Many lenders also want a duplicate set of keys. Some install GPS and starter interrupt devices that let them track the car and keep it from starting if you fail to repay.

The car is your approval, which makes it the lender’s way to collect. Monthly fees can run as high as 25%, or about 300% APR. If you fall behind, the lender can repossess the car even if you’ve made partial payments. In some states, the lender can keep everything it gets from selling the car, even if that’s more than you owed.

Pawn loans

A pawn shop doesn’t look at your credit, your income, or your bank account. It appraises what you bring in, such as jewelry or a musical instrument. It then lends you part of its value.

That makes a pawn loan the only one of the three that never touches your bank account. If you don’t repay, the shop keeps the item, and pawn loans are typically non-recourse, meaning the lender can’t come after you for more. The trade-off is that you’ll get less than the item is worth, and you’ll lose it if you can’t pay. Fees and terms are set by state law.

Read more >> How to Get an Emergency Loan With Bad Credit

If you can’t make a payment

You can take back a lender’s permission to withdraw from your account. The CFPB advises that you:

• Tell the lender, in writing, that you’re revoking your permission for automatic payments.
• Tell your bank or credit union that you’ve revoked it.
• Give your bank a stop payment order at least three business days before it’s scheduled.

Read more >> How to Negotiate Credit Card Debt With Your Creditor

‍Stopping the withdrawals doesn’t cancel the debt. You can revoke a lender’s permission to take money from your account. But the loan is still owed, and the lender can keep trying to collect other ways.

If you’re juggling payments you can’t cover, a nonprofit credit counselor can build a plan with you and talk to lenders on your behalf. The National Foundation for Credit Counseling connects people to free or low-cost counseling at 800-388-2227.

Options that can cost less

Ask the company you owe first

If you need the money for one bill, call that company first. Many creditors are willing to work out a smaller or later payment, and asking costs nothing. Utility companies, landlords, and medical offices often have payment plans, but you usually have to ask.

Borrow from a credit union

Federal credit unions can offer payday alternative loans (PALs). These are small, short-term loans that you repay over up to 12 months in installments, instead of one lump sum. Interest is capped at 28% APR, and the application fee can’t be more than $20.

Some PALs require you to be a member for at least a month first, so it helps to join a credit union before you need one.

Try a cash advance app

If you need a few hundred dollars until payday, a cash advance app can cost less than a payday loan. Most cash advance apps offer between $25 and $500 per pay period.

They work like a payday loan: You link your bank account, the app looks for regular deposits, and it takes the repayment automatically on your next payday. The difference is the price: Many apps charge no interest. Instead, they charge for instant delivery, ask for a tip, or offer a monthly subscription.

Add up those costs before you sign up, and ask what happens if the repayment can’t go through on payday.

Grant Cash Advance offers $25 to $500 to eligible customers with no interest, no credit check, and no late fees. Instant delivery is available for a fee. Repayment comes out of your bank account automatically on your next payday, so plan for less to spend that pay period.

Read more >> How To Get A Lower Interest Rate On A Personal Loan

Three signs you're looking at a scam. Payday, title, and pawn lenders are expensive but legal. These aren’t: a guarantee before you apply, a fee before you receive the money, or a lender with no license in your state. The fastest way to check is NMLS Consumer Access. It’s free and takes a minute.

Bottom line

You can get a loan without a credit check, but you’ll usually pay for it with a much higher price and with access to your bank account. Know the total cost, how the lender collects, and how to take that access back.

Your credit decides more than whether you’re approved. It also sets what you pay. Paying a no-credit-check loan on time usually doesn’t change that, because those payments rarely reach your credit report. A Kikoff Credit Account reports your on-time payments to Equifax, Experian, and TransUnion, so the next time you need to borrow, a credit check can work for you. There’s no credit check to sign up, and plans start at $5 a month.